As of December 31, 2022, the fintech giant PayPal owned a total of $604 million worth of Bitcoin ($BTC), Ethereum ($ETH), Litecoin ($LTC), and Bitcoin Cash ($BCH) on behalf of its clients.
It disclosed its interests in its annual report to the U.S. Securities and Exchange Commission (SEC). The majority of PayPal customers’ cryptocurrency holdings were in Bitcoin, with BTC accounting for $291 million of the company’s total assets. $250 million were kept in ETH, compared to $63 million in LTC and BCH.
Cointelegraph revealed that at the end of the year, PayPal’s cryptocurrency assets amounted to 67% of its entire financial liabilities, or $902 million. The organization’s overall financial assets exceeded $25 billion. Despite releasing its crypto capabilities in October 2020, this is the first time PayPal has disclosed a breakdown of its cryptocurrency holdings in a disclosure.
In its registration, PayPal stated: Due to the technical, legal, and regulatory risks involved with cryptocurrencies, we recognize a crypto asset safeguarding responsibility to represent our commitment to preserving the crypto assets stored for the benefit of our clients.
The company’s digital assets are held with a third-party custodian, which is legally obligated to segregate client assets and guarantee they are not merged with the company’s assets or other assets.
PayPal noted that even if the custodian complies with these requirements, there is no certainty that these contractual protections would prevent the assets from being included in the custodian’s estate in the case of insolvency.
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